HomeMy WebLinkAboutMINUTES - 10092001 - SD.3 TO: BOARD OF SUPERVISORS s CONTRA
FROM: JOHN SWEETEN, COUNTY ADMINISTRATOR = COSTA
COUNTY
DATE: October 9, 2001 °�� • �`
SUBJECT: SEVEN HILLS SCHOOL FINANCING
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
1. Hold a public hearing on the proposed financing by the California Statewide Communities
Development Authority (the "Authority").
2. Approve the obligations to be undertaken by the Authority to benefit the Seven Hills School in
an amount not to exceed $7,000,000 for the financing of renovations and rehabilitation to the
existing school facility and construction of certain new structures.
BACKGROUND:
California Statewide Communities Development Authority (CSCDA) is a joint powers authority
consisting of numerous California cities, counties and special districts, including the County of
Contra Costa. The Authority is authorized to assist in the financing of facilities for non-profit public
benefit corporations.
In order to initiate a financing, the member participant in which proposed facilities will be located
must (i) conduct a public hearing and (ii) approve the Authority's issuance of indebtedness.
The Seven Hills School, located at 975 North San Carlos Drive, Walnut Creek, California, is an
independent school that qualifies as a non-profit 501(c)3 educational organization.
CONTINUED ON ATTACHMENT: X YES SIGNATURE: i
O`�v�Jlra-
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
�- PROVE OTHER
SIGNATURE(S):
ACTION OF BOARD0 7 APPROVED AS RECOMMENDED AWHEW
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A
UNANIMOUS(ABSENT 1 TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED
ABSENT: ABSTAIN: ON THE MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN. 1
ATTESTED
JOHN SWEETEN,CLERK OF
THE BOARD OF SUPERVISORS AND
COUNTY ADMINISTRATOR
BY DEPUTY
Contact: Laura Lockwood, CAO—Capital Facilities and Debt Mana lent, 335-1093
cc: CAO–Capital Facilities& Debt Management
The school, established in 1962, currently operates a single-campus, independent day school for
370 stEldents from pre-school through eighth grade. The campus is located on 9.5 acres in Walnut
Creek adjacent to Heather Farms and the Iron Horse Trail. The school property, formerly the Seven
Hills Ranch, was purchased in 1966 and consists of 11 buildings; an outdoor play area including a
tennis court, swimming pool, play fields, climbing structures, and two outdoor eating areas, a
gymnasium, and technology center.
The school attracts students from a wide area of central.Contra Costa County. Approximately 19..5%
of the student body represents students of color and approximately 10% of students receive tuition
assistance.
The school is embarking on a master plan project that includes the renovation of several buildings,
construction of certain new structures and rehabilitation of the play areas and entranceways. The
Seven Hills School. has filed an application for Conduit Financing through the California Statewide
Communities Development Authority in order to allow it to arrange for tax-exempt financing for this
project.
The County is not liable for repayment of any part of the debt service associated with these
obligations. Rather, the security for the debt obligations will be a pledge of gross revenues from
operations of the school and a first deed security interest in the land and buildings of the school.
i
RESOLUTION OF THE BOARD OF SUPERVISORS OF
CONTRA COSTA COUNTY APPROVING A FINANCING TO
BE UNDERTAKEN BY THE CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT AUTHORITY TO BENEFIT
SEVEN HILLS SCHOOL
WHEREAS, Seven Hills School (the "School") has requested that California Statewide
Communities Development Authority (the "Authority") participate in a financing for the purpose of
financing the acquisition, construction, renovation and reconstruction of certain educational facilities
(the "Facilities") located within the County of Contra Costa(the "County"); and
WHEREAS, the Authority will issue its revenue bonds (the 'Bonds"), in an aggregate
principal amount not to exceed $7,000,000, in connection with the financing;and
WHEREAS, the Authority and the School will enter into a loan agreement (the "Loan
Agreement") under which the Authority will loan the proceeds of the Bonds to the School and the
School will use such moneys for the purpose of financing the costs of acquisition, construction,
renovation and reconstruction of educational facilities; and
WHEREAS, pursuant to Section 147(f) of the Internal Revenue Code of 1986, as amended
(the "Code"), the issuance of the Bonds must be approved by the County because the Facilities are
located within the territorial limits of the County; and
WHEREAS, the Board of Supervisors of the County (the 'Board of Supervisors ") is the
elected legislative body of the County and is the applicable elected representative required to approve
the issuance of the Bonds under Section 147(f) of the Code;
WHEREAS, the School and the Authority have requested that the County approve the
issuance of the Bonds in order to satisfy the public approval requirements of the Code, and to satisfy
the requirements of Section 147(f) of the Code and the requirements of Section 9 of the Amended
and Restated Joint Exercise of Powers Agreement (the "Agreement"), dated as of June 1, 1988,
among certain local agencies, including the County; and
WHEREAS, pursuant to Section 147(f) of the Code, the Board of Supervisors has, following
notice duly given, held a public hearing regarding the Financing and the execution and delivery of
the Loan Agreement, and now desires to approve the Financing and the execution and delivery of the
Loan Agreement; and
WHEREAS, the Board of Supervisors understands that its actions in holding this Public
Hearing and in approving this Resolution do not obligate the County in any manner for payment of
the principal, interest, fees or any other costs associated with the issuance of these bonds, and said
Board of Supervisors expressly conditions its approval of this Resolution on that understanding.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Supervisors of the County of
Contra Costa, as follows:
Section 1. The Board of Supervisors hereby approves the issuance of Bonds for
purposes of Section 147(f) of the Code and Section 9 of the Agreement.
7854A 024062/004965 SFNW01
RESOLUTION NO. 2001/466
Section 2. The officers of the Board of Supervisors are hereby authorized and directed,
jointly and severally, to do any and all things and execute and deliver any and all documents,
certificates and other instruments which they may deem necessary or advisable in order to
consummate the issuance, sale and delivery of the Bonds by the Authority, and to execute and deliver
such certificates and other documents they may deem appropriate and otherwise to carry out, give
effect to and comply with the terms and intent of this Resolution. Any actions heretofore taken by
such officers are hereby ratified and approved.
Section 3. The Board expressly conditions its approval of this Resolution on its
understanding that the County of Contra Costa shall have no obligation whatsoever to pay any
principal, interest, fees or any other costs associated with the Authority's issuance of these private
activity bonds for the construction of improvements at Seven Hills School in Contra Costa County.
Section 4. This Resolution shall take effect from and after its passage and approval.
1, Gina Martin,Clerk of the Board of Supervisors of Contra Costa County, hereby certify that
the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the
Board of Supervisors of Contra Costa County on the 9th day of October ,2001,by the
following vote,to wit:
AYES: BOARD MEMBERS: GIOIA, GERBER, DESAULNIER
GLOVER and UILKEMA
NOES: BOARD MEMBERS: None
ABSENT: BOARD MEMBERS: None
Gina Martin,Chief Clerk of the Board
78540 024062/004965 SFNW01
RESOLUTION NO. 2001/466
08/10/01 16:15 FAX 1@ 002/008,
CALIFORNIA STATEWU E COAMUNMEES
DEVEVLOPMENT AUTHORITY'
APPLICATION FOR CONDUIT FINANCING FOR 501(C)(3)NON-PROFIT
The Seven Hills School
A. DETAILED HISTORY OF APPLICANT:
The Seven Hills School
Principal Contact: Joel King
Business Manager
The Seven Hills School
975 North San Carlos Drive
Walnut Creek, CA 94598
T: (925) 933-0666 F: (925) 933-7271
Sponsoring Jurisdiction: County of Contra Costa
651 Pine Street,4m Floor,North Wing
Martinez,CA 94553-0095
Tel: (925)335-1255
Fax: (925) 335-1265
Principal Contact:
Laura Lockwood
OWNERSHIP STRUCTM: The Seven Hills School ("Seven Hills") is an independent
school and a qualified 501(c)(3)organization.
08/10/01 16:15 FAX Q 003/008
The Seven Hills School, established in 1962, is a not-for-profit, independent,
coeducational day school for children from pre-school through eighth grade. The campus
is located on 9.5 acres in suburban Walnut Creek- With it fiffly enrolled student body of
370 students,the school strives to be an economically and ethnically diverse community.
Approximately 19.5%of the student body represents students of color and approximately
10%of the students receive tuition assistance.
The school property, formerly the Seven Hills Ranch, was purchased in 1966 and is
situated in an unincorporated area of Walnut Creek, The campus consists of 11
buildings; outdoor play areas including a tennis court, swimming pool, a lower field,
climbing structures, and two outdoor eating arm; a gymnasium and technology center.
The school attracts students from a wide area of central Contra Costa County.
The school is embarking on a master plan project which includes the renovation of
several buildings, construction of certain new structures and rehabilitating the play areas
and entrance ways. The Seven Hills School is filing an application for Conduit Financing
from the California Statewide Communities Development Authority in order to complete
its tax-exempt financing for the project.
The Seven Hills School provides many public benefits to the community it serves directly
and indirectly, The School provides over 5% of tuition revenue as financial aid,totaling
approximately $200,000 in the current school year.
Seven Hills does not discriminate on the basis of,age, color, creed, disability, gender,
marital status, national or ethnic origin, race, religion or sexual orientation. This policy
applies to all areas of student concerns: admissions, educational policies, teacher hiring,
financial aid, and other school-administered programs. Seven Hills's goals of excellence
in general studies, appreciation of the arts, and fostering community spirit, are central to
all that the School does. Seven Hills endeavors to make a love of learning paramount for
its students: to evoke a commitment to a life of independent learning. Seven Hills
students are each encouraged to set goals and to do their personal best, in conjunction
with the high standards set by the school. Seven Hills emphasizes supportive, teacher-
guided, but self-directed learning. Students explore the world, learn to filter meaning
from their observations, discuss and debate concepts with their peers, probe values and
ethics, and then integrate all of these explorations into patterns of knowledge and
personal meaning. Seven Hills is fully accredited by the California Association of
Independent Schools("CAIS').
16:15 FAX 1?1004/008
Tuition versus comparable schools in the area
School Year 2000/01
CAIS&h
�School LocatiOn "I'llition 001
East Bay Berkeley $11,200 yes
French/American
Head Royce Oakland $15,500 yes
Redwood Day Oak-land $11,480 Yes
St Paul's Episcopal Oakland $12,025 Yes
We Seven Hills Walnut Creek $10,705 yes
I School
Seven Hills's students come from economically, culturally and geographically diverse
backgrounds. In a region known for its transience, the school is a strong community that
serves as an anchor for current and alumni families.
C. SOURCES AND UsEs OF FUNDS: Attached is a summary of the Sources and Uses of
Funds for the financing. no Seven Hills School will be providing funds to reimburse
certain costs of issuance expenditures above the allowable 21% limit for nonprofit
corporations.
D. FINANCING DESCRIPTION: The Seven Hills School will be issuing Fixed Rate Non-
Rated Tax-Exempt Revenue Bonds. Final maturity is scheduled to be in the year 2031
with debt amortization creating level bond payments for the life of the financing'(with
several years.of interest only payments initially) . The financing will provide a bond
reserve account equal to one year's maximum debt service payment. The interest rate
will be negotiated with the buyer(s) and debt service payments will be made on a semi-
annual basis- The structure will provide approximately $5.0 million of construction
proceeds upon delivery of the bonds.
E. SFCuRrry DESCRIPTION: The security for the bonds will be a pledge of Gross
Revenues from operations of the School as well as the land and building (real estate) of
the school carnpus.
F. FYNANciNG TEAM: Attached is a distribution list of financing team members.
Please let me know if there is anything else that I can provide to you for this application_
Thankyou for your assistance.
08/10/01 16:15 FAX U005/008
SOURCES AND USES OF FUNDS
Tile Seven Hills Scbool
2001 Revenue Bonds-Sale to Franklin
Sources:
Bond Proceeds.-
Par
roceeds:Par Amount 5,575,000.00
Other Sources of Funds:
Equity Contribution 38,500.00
5,613,500.00
Uses:
Project Fund Deposits:
Project Fund 5,000,000.00
Other Fund Deposits:
Debt Service Reserve Fund 463,262.50
Delivery Date Expenses-
Cost of Issuance 100,000.00
ilndcrwriters Discount 50,000.00
150,000.00
Other Uses of Funds:
Project Fund 237.50
5,613,500.00
Aug 10,2001 3:51 pm Prepared by Stone&Youngberg LLC (Finance 4.400 Sevenl4ills:SEVEN-2001 4) Page I
08/10/01 16:15 FAX U006/008
BOND DEBT SERVICE
The Scvcn Hills School
2001 Revenue Bonds-Sale to Franklin
Dated Date OS/01/2001
Delivcry Date 08/01/2001
Period
Ending Principal Coupon Interest Debt Service
08/01/2002 376,312.50 376,312.50
08/01/2003 376,312.50 376,312.50
08/01/2004 376,31250 376,312.50
08/01/2005 376,312.50 376,312.50
08/01/2006 85,000 6.750% 376,312.50 461,312.50
08/01/2007 90,000 6.750% 370,575.00 460,575.00
08(0112008 95,000 6.750% 364,500.00 459,500.00
08/01/2009 105,000 6.750% 358,087.50 463,087.50
08/01/2010 110,000 6.750% 351,000.00 461,000.00
08/01/2011 115,000 6.750% 343,575-00 458,575.00
08/01/2012 125,000 6.7500/9 335,812.50 460,812.50
08/01/2013 135,000 6.750% 327,375.00 462,375.00
08/01/2014 145,000 6.750% 318,262.50 463,262.50
08/01/2015 150,000 6-750% 308,475.00 458,475.00
08/01/2016 160,000 6.750% 298,350.00 458,350.00
08/01/2017 175,000 6.750% 287,550.00 462,550.00
08/01/2018 185,000 6.750% 275,737.50 460,737.50
0810I/2019 195,000 6.750% 263,250.00 458,250.00
08/01/2020 210,000 6.750% 250,087.50 460,087.50
08/01/2021 225,000 6.750% 235,912.50 460,912.50
09/01/2022 240,000 6.750% 220,725.00 460,725.00
08/01/202.3 255,000 6.750% 204,525.00 459,525.00
08/01/2024 275,000 6.750% 187,312.50 462,312.50
08/01/2025 290,000 6.7506/9 168,750.00 458,750.00
08/01/2026 310,000 6.750% 149,175.00 459,175.00
08/0I/2027 330,000 6.750% 128,250.00 458,250.00
08/01/2028 355,000 6.750% 105,975.00 460,975.00
08/01/2029 380,000 6.750% 82,012.50 462,012.50
08/01/2030 405,000 6.750% 56,362.50 461,362.50
08/012031 430,000 6.750% 29,025.00 459,025.00
5,575,000 7,902,225.00 13,477,225.00
Aug 10,2001 3:51 pm Prepared by Stone&Youngberg LLC . (Finance 4.400 SevenHills:SEVEN-2001 4) Page 2
08/10/01 16:15 FAX Q007/008
NET DEBT SERVICE
The Scvcn Hills School
2001 Revenue Bonds-Sale to Franklin
Annual
Period Total CSCDA Annual Trustee General Debt Service Net
Ending Debt Service Expenses Services Fund Reserve Fund Debt Service
08/012002 376,312.50 27,795.76 348,516.74
08/01/2003 376,312.50 3,345.00 2,500 27,795.76 354,361.74
08/01/2004 376,312.50 3,345.00 2,500 27,795.76 354,361.74
08/01/2005 376,312.50 3,345.00 2,500 27,795.76 354,361.74
09/012006 461,312.50 3,345.00 2,500 27,795.76 439,361.74
08/01/2007 460,575.00 3,319.50 2,500 27,795.76 438,598.74
08/01/2008 459,500.00 3,267-00 2,500 27,795.76 437,471.24
08/01/2009 463,087.50 3,211.50 2,500 27,795.76 441,003.24
08/012010 461,000.00 3,151.50 2,500 27,795.76 438,855.74
08/01/2011 458,575.00 3,087.00 2,500 27,795.76 436,366.24
08/01/2012 460,812.50 3,019.50 2,500 27,795.76 438,536.24
08/01/2013 462,375.00 2,947.50 2,500 27,795.76 440,026.74
08/01/2014 463,262.50 2,869.50 2,500 27,795.76 440,836.24
08/01/2015 458,475.00 2,785.50 2,500 27,795.76 435,964.74
08/01/2016 458,350.00 2,697.00 2,500 27,795.76 435,751.24
08/01/2017 462,550.00 2,604.00 2,500 27,795.76 439,858.24
08/01/2018 460,737.50 2,503.50 2,500 27,795.76 437,94524
08/01/2019 458,250.00 2,395.50 2,500 27,795.76 435,349.74
08/01/2020 460,087.50 2,281.50 2,500 27,795.76 437,073.24
08/01/2021 460,912.50 2,160.00 2,500 27,795.76 437,776.74
08/01/2022 460,725.00 2,029.50 2,500 27,795.76 437,458.74
08/01/2023 459,525.00 1,890.00 2,500 27,795.76 436,11924
08/01/2024 462,312.50 1,741.50 2,500 27,795.76 438,758.24
08/01/2025 458,750.00 1,582.50 2,500 27,795.76 435,036.74
08/01/2026 459,175.00 1,413.00 2,500 27,795.76 435,292.24
08/01/2027 458,250.00 1,233.00 2,500 27,795.76 434,19724
08/01/2028 460,975.00 1,041.00 2,500 27,795.76 436,720.24
08/01/2029 462,012.50 835.50 2,500 27,795.76 437,55224
08/0112030 461,362.50 615.00 2,500 27,795.76 436,681.74
08/01/2031 459,025.00 37950 2,500 -32,647.88 491,058.26 3,494.12
08/01/2032 129.00 2,500 32,647.88 -30,018.88
13,477,225.00 68,569.50 75,000 0.00 1,297,135.30 12,323,659.20
Aug 10,2001 3:51 pm Prepared by Stone&Youngberg LLC (Fimmoc 4.400 ScvcnHills:SEVEN-2001 4) Pagc 3
08/10/01 16:15 FAX Q008/008
Stone & Youngberg LLC
Establishcd r93i
Seven Hills School
2001 Revenue Bonds
Distribution List
SEVEN HILLS SCHOOL
TEFRA
Joel King,Director of Finance and Operation
Seven Hills School Laura Lockwood
975 N. San Carlos Drive County of Contra Costa
Walnut Creek,CA 94598 651 Pine Street,4th Floor,North Wing
(925)933-0666 Martinez,CA 94553-0095
(925)933-6271 (Fax) (925)335-1093
(925)974-4999 x 4982(Voice Mail) (925)646-1228 Fax
jk-ing@sevenhills pvt.kl2.caus Ilock@caZco.contra-costa.ca.us
APPRAISER
Robert Gallo,Board Member
Merrill Lynch Jess Smyers
1331 N.California Blvd., Suite 700 StnyersAppraisal
P_O.Box 8043 1870 Olympic, Suite 105
Walnut Creek,CA 94596 Walnut Creek, Ca 94596
(925)945-4823 (925)947-1140
(800)234-3858 (925)947-4906 Fax
(925)935-3643 Fax 1-bsmyers@smyersappraisal.com
rgallo@a plient.ml.com
ISSUER
SCHOOL COUNSEL Mike LaPierre,Project Manager
[To Come] California Statewide Communities
Development Authority
PLACEMENT AGENT 1470 Maria Lane, Suite 400
Walnut Creep CA 94596-5339
Dirk ten Grotenhuis (925)933-9229 x12
Stone& Youngberg LLC (925)933-8457 FAX
50 California Street,35th Floor mlapierre@cacommunities.com
San Francisco,CA 94111
(415)445-2331 ISSUER'S COUNSEL
(415)445-2395 FAX [To Come]
dteng@cyllc.com
BOND COUNSEL TRUSTEE
Sean Tierney [To Come]
Hawkins,Delafield& Wood TRUSTEE COUNSEL
One Embarcadero Center, Suite 1040
San Francisco,CA 94111 [To Come]
(415)486-4201
(415)397-1513 Fax
stierney@hdw.com
421813
8/8/01 50 California Street - San rranciscu, California 94111 - 415/445-2300